MUMBAI — The Indian rupee is expected to trade within a narrow range of 88.5 to 89 per U.S. dollar through the end of November, according to a report released Wednesday by Bank of Baroda (BoB). The currency’s movement will largely depend on the dollar’s trajectory and developments in U.S.–India trade negotiations, the bank said.
The report noted that the rupee’s outlook hinges on upcoming U.S. macroeconomic data — particularly inflation and labor market indicators — which could influence the Federal Reserve’s December policy decision. “Any positive development on the U.S.–India trade deal is likely to lift investor sentiment,” BoB stated, while cautioning that concerns over higher U.S. tariffs may continue to weigh on foreign portfolio investor (FPI) inflows.
Despite trading near record lows in recent weeks, the rupee has remained relatively stable due to active intervention by the Reserve Bank of India (RBI). The bank observed that the RBI’s efforts to prevent the currency from breaching new lows marked a shift from earlier months when the rupee was allowed more flexibility.
Over the past month, the rupee traded between 87.83 and 88.70 per dollar, while average annualized volatility dropped from 4 percent in October to 1.2 percent in November.
Globally, emerging market currencies have shown mixed performance, often strengthening when major advanced-economy currencies weakened. Meanwhile, the U.S. dollar has held firm as market participants increasingly expect the Federal Reserve to pause further rate cuts this year.
BoB added that the Fed is likely to maintain a cautious stance in light of limited economic data availability stemming from the prolonged U.S. government shutdown.
Overall, the report projects a period of subdued volatility for the rupee through November, supported by central bank intervention and steady trade-related flows. (Source: IANS)
